The Government has stopped paying petrol subsidies since the beginning of this month due to lower global oil prices, Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad said.
“The savings on petrol subsidies next year is expected to be more than RM10bil if oil prices remain stable,” he told reporters at the Parliament lobby yesterday.
Shahrir said that at US$65 (RM235) per barrel the Government would not be paying subsidies and that the focus now would be on deciding whether to set a floor price or figuring out a way for the Government to get some income from the sale of petrol.
“Even with petrol retailing at RM2 per litre, we are not paying any subsidy. We have actually arrived at a time when the price can return to RM1.92,” he said.
“In that context, we hope to be able to set a policy to address this when the National Economic Council meets next. There must be a decision made on what the floor price should be.”
Shahrir said that for six months from September 2001 to February 2002 the Government had collected taxes from the retail sale of petrol but had stopped that practice since then.
“Earlier announcements of how much the subsidies cost us, even as recent as 2005 or 2006, always included how much we had foregone in terms of taxes.
“We have stopped doing this, however, and just focused on how much subsidy we are paying,” Shahrir said, adding that the Government was now enjoying some revenue due to the difference in the ex-refinery price and the price oil companies sold petrol to station operators.
He added that the revenue being taken now was a form of tax that could max out at 60 sen per litre.
Shahrir also released information on the amount of fuel subsidies paid so far, which have amounted to RM15.57bil as at the end of October.
Fuel subsidies last year cost the Government RM16.18bil.
The fuel subsidies in October amounted to RM610mil, compared with RM2.99bil in May when oil prices peaked at over US$120 (RM432) per barrel.
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